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Companies in California may face new challenges in growth going forward, as evidence suggests that the economy in California is cooling.

California May be Experiencing an Economic Chill

The OC Register reported on the evidence of slowed economic growth in California. According to the OC Register, California has slipped from fourth to 35th in terms of economic growth across the nation.

This ranking is based on state-by-state gross domestic product. It revealed that California’s economy grew at a rate of 2.1 percent annually in the second quarter of 2017. This is actually an increase compared with the first quarter, when California’s economy was growing at a very slow .6 percent growth. However, it reflects a marked decline from a year ago when economic growth in California was measured at 3.7 percent. It also suggests California is likely to fare far worse in annual growth this year than it did last year. In 2016, California’s economy grow at a 3.3 percent annual pace, which was the fourth best among all of the states in the U.S.

The growth rate in California of 2.1 percent was below the national growth rate of 2.8 percent annual growth, and it placed California as 35th among the 50 states in terms of its growth. This data point is not the only one suggesting a weaking economy in California either. Job creation was measured at just 1.6 percent statewide in 2017, which OC Register indicates is the slowest rate of job creation in the past five years. Furthermore, total wages paid in California also grew very slowly last year. In the second quarter, total wages paid in California increased at a rate of just 3.5 percent annually. This is the second slowest increase in total wages paid since 2013.

Because so many metrics show that California is experiencing slow growth, the outlook for the state going forward in 2018 is not as positive as some leaders hoped it would be. The Federal Reserve Bank of Philadelphia aggregates data on growth and tracks six-month outlooks for each state, and their analysis revealed more bad news for California. California was found to have the 10th worst economic prospects of all of the states in the U.S., when measured in August 2017, and was found to have the 13th worst economic prospects of all of the states when measured in September of last year. These are the worst projections for the state since 2010.

However, the OC Register indicates that the troubles in California could affect not just people in the state but also the nation as a whole. That’s because California’s GDP in the second quarter accounted for around 1/7 of the total business output across the nation. As a business leader, if California performs poorly, it could affect the economy as a whole.

Contact a Business Litigation Lawyer

When economic conditions are less than optimal in California, companies will need to work even harder to be successful. Companies should ensure they are not undermining their prospects of achieving success by making mistakes in compliance with regulations or by being lax in protecting the legal interests of their organizations.

Gehres Law Library provides a broad range of assistance to companies in understanding their obligations and enforcing their rights in the state of California. Contact a business attorney or business litigation lawyer at our firm today to find out more about how we can help. You can give us a call at 858-964-2314 or contact us online at any time for a complimentary consultation.